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With Gattex Approval, NPS Joins Pharma’s Commercial Ranks

This article was originally published in The Pink Sheet Daily

Executive Summary

NPS Pharmaceuticals will launch Gattex for the long-term treatment of short bowel syndrome, an ultra-orphan indication, with an ultra-orphan price tag to match: $295,000 per year.

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Rare disease drug development has ballooned in just three years, powered by the success of independent biotechs like Alexion, Big Pharma’s entrée into the field, and pressure from regulators and payors that is dis-incentivizing development of traditional primary care drugs. The positive momentum has intensified dealmaking in the orphan drug space and is giving investors confidence to back rare disease-focused start-ups. Some have coined the resulting movement the “orphan drug bubble,” but interest isn’t likely to deflate soon – at least not as long as Big Pharma continues to invest in the area and industry is able to sustain a favorable reimbursement climate for ultra-premium-priced drugs.

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Five years ago, NPS Pharmaceuticals received an FDA "approvable" letter for its osteoporosis candidate Preos (parathyroid hormone), a regulatory action that sent the company into a tailspin of cost cuts and downsizing. Now the Parsippany, NJ-based specialty pharma is gearing up for a second shot at the commercial market. Unlike in 2006, when NPS was focused on therapies for big primary care indications, however, the company believes success will come from a focus on niche gastrointestinal and endocrine disorders.

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